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Road investment and regional productivity growth: the effects of vehicle intensity and congestion

  • Daniel Montolio
  • Albert Solé-Ollé

This article presents a series of novelties with respect to previous studies of the effect of productive infrastructures on output growth. We study public investment in road infrastructures as a determinant of the total factor productivity (TFP) growth for Spanish provinces (NUTS 3) for the period 1984-1994. We allow the effect of road infrastructures to depend on the extent of the road use by provincial industries, proxied by these industries' vehicle intensity. Moreover, we consider the services provided by the stock of road infrastructures as an impure public good, that is, one that is subject to congestion. Finally, using the instrumental variables technique, we account for possible problems of endogeneity in the regressions. Copyright (c) 2008 the author(s). Journal compilation (c) 2008 RSAI.

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Article provided by Wiley Blackwell in its journal Papers in Regional Science.

Volume (Year): 88 (2009)
Issue (Month): 1 (03)
Pages: 99-118

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Handle: RePEc:bla:presci:v:88:y:2009:i:1:p:99-118
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